Residents of city Y have more purchasing power than residents of citie

Question

Residents of city Y have more purchasing power than residents of cities X and Z. At the same income levels, residents of city Y spend less for food and housing and can therefore purchase more products.

Which of the following inferences is best supported by the statements made above?

A. Residents of city Y have the ability to purchase food and pay for housing considerably less than residents of cities X and Z because food and housing cost less.
B. Residents of city Y do not need to buy as much food and rent/build as big of houses as residents of cities X and Z.
C. City Y has lower sales taxes and cheaper land to build property on, compared to cities X and Z.
D. Residents of city Y do purchase more products than residents of cities X and Z.
E. Residents of city Y pay more for other expenses, compared to residents of cities X and Z.

FLP922 · Answer

Can you explain this one please?

Abhishek009 · Answer

Purchasing Power = The amount of goods or services that one unit of money.

Let the amount of money available be 100

Quantity that can be bought in City Y = 20 (Per unit price of commodity be 5) and Quantity that can be bought in City X = 10 (Per unit price of commodity be 10) , and that in City Z be 2 (Per unit price of commodity be 50)

Now, Check the options

(A) True, per unit cost of item is less in City Y than in City X and City Z
(B) Residents of city Y do not need to buy as much............... Irrelevant, need to buy is out of context..
(C) Sales tax is irrelevanat in the context of purchasing power...
(D) Y will definitely purchase more products than City X and Z as the per unit cost of item is less in CIty Y , but it can not be an inference, as it has been explicitly been stated that purchasing power is more in City Y.
(E) Paying more for other expenses is out of context ad scope of discussion.

Thus, Answer must be (A)

Ana96 · Answer

Hi, Given the premise, since the second part talks about Y spending less at the same income level, wouldn't this be a case where X,Y and Z each have 100 bucks but Y spends 20 on food and housing whereas x and z spends more than that. I dont see how this takes cost into account. This could merely be a choice. X and Z prefer expensive housing and food, Y doesnt.

VerbalBot · Answer

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Residents of city Y have more purchasing power than residents of citie

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Residents of city Y have more purchasing power than residents of citie

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